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Deleveraging Continues

As leveraged assets go down in value, the leverage multiples go up. Adding to that multiple is the falling dollar and the fact that these assets are in reality debt deposits, not cash deposits, that were passed on in different forms to be leveraged over and over.

-Minyan Jim

Credit Market Misery

Bennet Sedacca Sep 24, 2008 12:25 pm


	Spreads blowing out across the board.

The credit market is getting eviscerated. Period.

Whether it's corporates, preferreds or hybrids, spreads continue to blow out.

The Goldman Sachs (GS) preferred I bought the other day at 11.5%? Gonzo. Thank you, Warren.

Don't let the stock market fool you. The credit market is imploding.

If you don't believe me, take a look at the TED spread below, the difference between three month Treasuries and 3 month Eurodollars.

Click to enlarge

The credit market has been a great leading indicator for stocks lately.

For a more detailed look into this topic, please see A Tale of Two Markets.

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No positions in stocks mentioned.

Bennet Sedacca is President of Atlantic Advisors, www.atlanticadvisors.com, and brings with him more than 26 years of securities industry experience. Providing expertise in the fixed income arena, equity markets, and cash management, Bennet has assisted both individuals and institutions in the implementation of their investment objectives.

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